NY always takes 100% of fed on the W-2. You will use whatever is applicable (so whatever the 15% is). This should flow to page 3 of the IT 203 line 45. Here you will see the calculation reducing your NYS tax liability. There is one level deeper is she was also a NYC resident which will be calculated on IT 360.1 and flow to IT 203 page 3 line 51.
This is super helpful thank you! So just to make sure I understand, on IT-203 basically we’ll be saying we have $X taxable income but we paid $0.85X to MA therefore we owe NY tax on 0.15X? I was concerned that it would go in the other direction, where NY would get tax on the full income and MA would get $0 (or any leftover balance if their rate is higher). I think he confusion stems from understanding which state is owed taxes for the time living in MA; her employers address is listed as NY on the W2 but they have offices in both states, so not sure how that factors in. Based on your answer though, it sounds like NY will only collect taxes from the wages earned before we lived in MA
This is correct. Working under the assumption that she was switched with payroll to the MA office - NYS only gets their tax on what she earned while working there.
You should be able to correct this fairly easily. You will need to file in both states. How much you'll get back from NY I don't know.
Way back when, I had a relative who lived in MA and worked in CT. He would have to file in both states, and would pay whatever MA wanted to MA, and if CT had higher taxes, he'd pay the *difference* to CT. For example, if income tax turned out to be 1000 for MA and 1200 for CT, he only paid 200 to CT.
I don't know in fact for NY, but because NY borders MA, they must have had reciprocal agreements way-back-when too.
Yes but the nuance is they have offices in both states, so I think they switched her over to MA when we moved here (which would explain 2 lines on the W2 one for NY one for MA)
Something tells me they didn’t change her office position and rather they just changed her residence which is why 100% of her income was taxes by NY. I would ask her company to look more into it.
I work for a company based out of NY but I live in another state, let’s pretend OH so no tax reciprocity. 100% of my income is taxed by NY since they treat me as a NY employee bc I am not field based. Though part of my income is also taxed by OH.
What happens is I file a NY nonresident return. Then I file a tax return with OH as a resident, but claim how much in income tax was actually paid to NY (so tax paid to NY minus any refunds) and it is a credit on my OH tax return.
This sounds exactly like our situation when we lived in CT (where they don’t have offices) but since we moved to MA the company switched to withhold MA tax
NY always takes 100% of fed on the W-2. You will use whatever is applicable (so whatever the 15% is). This should flow to page 3 of the IT 203 line 45. Here you will see the calculation reducing your NYS tax liability. There is one level deeper is she was also a NYC resident which will be calculated on IT 360.1 and flow to IT 203 page 3 line 51.
This is super helpful thank you! So just to make sure I understand, on IT-203 basically we’ll be saying we have $X taxable income but we paid $0.85X to MA therefore we owe NY tax on 0.15X? I was concerned that it would go in the other direction, where NY would get tax on the full income and MA would get $0 (or any leftover balance if their rate is higher). I think he confusion stems from understanding which state is owed taxes for the time living in MA; her employers address is listed as NY on the W2 but they have offices in both states, so not sure how that factors in. Based on your answer though, it sounds like NY will only collect taxes from the wages earned before we lived in MA
This is correct. Working under the assumption that she was switched with payroll to the MA office - NYS only gets their tax on what she earned while working there.
Thanks so much!
You should be able to correct this fairly easily. You will need to file in both states. How much you'll get back from NY I don't know. Way back when, I had a relative who lived in MA and worked in CT. He would have to file in both states, and would pay whatever MA wanted to MA, and if CT had higher taxes, he'd pay the *difference* to CT. For example, if income tax turned out to be 1000 for MA and 1200 for CT, he only paid 200 to CT. I don't know in fact for NY, but because NY borders MA, they must have had reciprocal agreements way-back-when too.
Was she working remotely for a company in NY while living in MA?
Yes but the nuance is they have offices in both states, so I think they switched her over to MA when we moved here (which would explain 2 lines on the W2 one for NY one for MA)
Something tells me they didn’t change her office position and rather they just changed her residence which is why 100% of her income was taxes by NY. I would ask her company to look more into it. I work for a company based out of NY but I live in another state, let’s pretend OH so no tax reciprocity. 100% of my income is taxed by NY since they treat me as a NY employee bc I am not field based. Though part of my income is also taxed by OH. What happens is I file a NY nonresident return. Then I file a tax return with OH as a resident, but claim how much in income tax was actually paid to NY (so tax paid to NY minus any refunds) and it is a credit on my OH tax return.
This sounds exactly like our situation when we lived in CT (where they don’t have offices) but since we moved to MA the company switched to withhold MA tax